Russian Federation: Russian Copyright Law: Transfer Of Exclusive Rights

Last Updated: 24 June 2014
Article by Petr Shevtsov and Valentin Petrov

Author's exclusive rights may be transferred either in full under an exclusive right transfer agreement (Part IV of the Russian Civil Code ("CC") Articles 1234 and 1285) or in part under a licensing agreement (CC Articles 1235 and 1286). Unlike right transfer or licensing agreements dealing with certain other categories of IP rights, in the context of author's rights neither type of agreement requires state registration. To be valid, both right transfer agreements and licensing agreements must include the price or method of its calculation (Articles 1234 and 1235 expressly state that this does not need to be "market" rate determined in accordance with the relevant procedure of CC Article 424) or indicate that the transfer or license is for free. In a rights transfer agreement, the rights are transferred at signing of the agreement, unless the agreement provides for a different moment of transfer.

A licensing agreement must describe the scope of licensed rights and authorized uses for the work. Any rights that are not expressly indicated in the licensing agreement are deemed not granted (CC Article 1235). A licensing agreement must indicate the license territory and license term (that cannot exceed the term of the exclusive right). If the license territory is not specified, the rule is that the license is granted for the use on the entire territory of the Russian Federation. If no license term is indicated and unless otherwise provided by law, the default 5 year term applies. A transfer of exclusive rights from one holder to another does not affect the rights of the license holder. The licensee must provide reports to the licensor regarding its use of the work, unless the licensing agreement provides otherwise. During the term of the license period, the licensor must refrain from any actions that may hinder the use of the work by the licensee in accordance with the license terms. Upon written consent of the licensor, the licensee may enter into a sublicense agreement with another person (CC Article 1238).

CC Article 1236 distinguishes between "simple (non-exclusive)" licenses whereby the licensor retains the right to issue similar licenses to other persons and "exclusive" licenses where the licensor may not do so. Unless the licensing agreement provides otherwise, a license is deemed to be a simple (non-exclusive) one. A licensing agreement may combine exclusive and non-exclusive licenses for different uses of one and the same work.

CC Article 1286 provides for the right of the Russian federal Government to establish minimum rates (i.e. a "floor") of author's fees payable for certain types of uses of works (for example, such minimum rates have been established for public performances of play scripts).

CC Article 1287 establishes specific rules applicable to licensing agreements between authors (or other holders of exclusive author's rights) and publishers ("publisher licensing agreements"). By law, the publisher is required to publish the work no later than the date established in the agreement. If the publisher fails to publish the work by such date, the licensor may terminate the agreement without paying any damages to the publisher (however, the licensor will still be entitled to receive the full amount of its compensation under the licensing agreement with the publisher). If the agreement does not specify any deadlines for the publication, the publication must take place within a period that is customary for such type of works. If that does not happen, the author or other rights holder may initiate court action to terminate the agreement (again, the licensor will be entitled to the full amount of its compensation under the agreement).

CC Articles 1288 and 1289 deal with agreements between authors and their customers whereby the author undertakes to create a certain scientific, artistic or literary work for the customer. Such agreements may provide either for a complete transfer of exclusive rights to the future work to the customer (in which case rules on rights transfer agreements generally apply), or for a transfer of certain specific rights to specific uses (in which case rules governing licensing agreements apply). To be valid, an agreement between the author and the customer must specify the term for the performance by the author of its obligation to create the work. Article 1289 provides that "if necessary and where valid reason" for the author's failure to deliver on time exist, an additional grace period (equal to one fourth of the original period, unless a longer period is allowed by the agreement) allowing the author to complete the work under the agreement applies. The wording of the rule on the grace period is rather ambiguous and it is not quite clear, for example, what circumstances qualify as "necessity" or "valid reason" for the author's delay. Article 1289 further provides that the customer may unilaterally terminate the agreement if the work is not completed by (i) the end of the grace period or (ii) the end of the original contractual term if it is clear from the terms and conditions of the agreement that the customer is no longer interested in the work if it is not completed by the end of the contract term (thus, it appears that the customer is not obligated to offer a mandatory "grace period").

CC Article 1290 limits the liability of the author under an exclusive rights transfer agreement and the licensing agreement by the amount of "real damage" (i.e. damages that do not include lost profit) caused to the other party, unless the agreement provides for a lower cap on liability (apparently, such limitation does not apply to similar agreements concluded by a rights holder other than the author). Similarly, Article 1290 provides that if the author fails to properly perform its obligations to create a work under an agreement with a customer, the author is required to return the advance payment received and pay liquidated damages (to the extent provided for by the agreement) to the customer, however, the total amount of the author's liability in this case is again capped at the amount of real damages incurred by the customer.

Russia is party to the Berne Convention for the Protection of Literary and Artistic Works of September 9, 1886 (as amended) and the Universal Copyright Convention of September 6, 1952 (as revised on July 24, 1971). Both became effective for Russia on March 13, 1995. As Russia is a party of the WTO, it is bound by the Agreement on Trade Related Aspects on Intellectual Property Rights (TRIPS). In 2008, Russia joined the WIPO Copyright Treaty (WCT) that entered into force with regard to Russia on February 5, 2009.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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